Smartphone Shipments Surpass PCs for First Time. What's Next?

With more and more consumers trading in their old feature phones for smartphones, the smartphone market actually eclipsed the PC market in terms of sales during the last quarter for the first time, according to data from IDC.

With more and more consumers trading in their old feature phones for smartphones, the smartphone market actually eclipsed the PC market during the last quarter for the first time, according to data from IDC.

The milestone was first noted by Fortune, which said that smartphones surpassed PC shipments much faster than expected. A Morgan Stanley analyst predicted it might happen in 2012.

In a Tuesday phone interview, Ramon Llamas, senior research analyst with IDC's Mobile Phone Technology and Trends team, said smartphone vs. PC shipments are a valid comparison because most people  particularly those in western countries  currently own a computer and a smartphone.

Helping those smartphone sales rates, however, is the fact that smartphones have a much faster replacement rate than PCs, he said. Also, the PC market is "pretty saturated" worldwide, while "you're still seeing tremendous growth" around smartphones.

As a result, we'll likely see a "ping pong effect" over the next several quarters when it comes to smartphone vs. PC shipments sales, Llamas said. By 2012 and 2013, however, we could see a "breaking away for smartphone shipments."

The PC sales numbers did not include tablets. Llamas said tablets are an "interesting phenomenon" but he did not see the devices overtaking smartphones anytime soon, primarily due to their size. "You can't stuff a tablet in your back pocket," he said.

At this year's Consumer Electronics Show, however, he did note many people toting tablets instead of laptops. "They're smaller [than laptops], lightweight, and can do a lot," Llamas said. As a result, tablets will likely take more from the PC market than the smartphones, he predicted.

When asked if PC makers should be concerned about the growth of smartphones (and tablets), Llamas said "concerned is too strong a word." The fact of the matter is, most major PC makers  like Dell and HP  are well-aware of the smartphone potential, and are moving into that area themselves.

PC makers "don't just look to rely on PCs," he said. "Yes, they'll be there in some way, shape, or form, but for smartphones, the market is growing and a lot of competitors are getting into it bigger and bigger."

HP will likely make headway in that area with its Palm acquisition, Llamas said. HP is actually hosting an event on Wednesday in San Francisco where it promised "an exciting WebOS announcement," which many believe will include the introduction of new smartphones and possibly a tablet.

The key thing going forward, Llamas said, is that companies that have not traditionally made phones which are getting into the smartphone market will have to figure out ways to distinguish themselves. Garmin tried with its GPS phone, but that wasn't a huge hit because most smartphones have built-in navigation apps. Vizio also announced a smartphone last month, but will also need to find a way to differentiate its device from those already on the market, he said.

About the Author

Chloe Albanesius has been with PCMag.com since April 2007, most recently as Executive Editor for News and Features. Prior to that, she worked for a year covering financial IT on Wall Street for Incisive Media. From 2002 to 2005, Chloe covered technology policy for The National Journal's Technology Daily in Washington, DC. She has held internships a... See Full Bio

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